Citrix preaches 'second mover advantage' over VMware
Far enough behind to succeed
Analysis Pop quiz. You’re a $7bn software company that has all the sex appeal of a shy potato. What do you do?
Buy XenSource, of course.
In August, Citrix dug deep and found $500m to acquire XenSource – a company expected to bring in all of $8m this year, according to our sources. In an instant, this deal transformed Citrix from a very competent, well-paid, niche application streamer to a major player in the most-hyped part of the server and management software markets. People who had no idea what Citrix actually does took notice and wondered how this company will fair against an upstart like VMware and a lumbering giant like Microsoft.
Wes Wasson, Citrix’s Chief Strategy Officer, sees the XenSource buy as the culmination of a multi-year charge. The software maker has acquired companies such as Netscaler, Teros, Reflectent, Orbital Data and Ardence as it looked to build out the bits and pieces that surround its core application delivery technology. With XenSource, Citrix completed this push, adding technology that sits at the very heart of the data center. Now, according to Wasson, Citrix is well poised to continue its mission of becoming a "successful, multi-billion dollar software company."
"We really have been on a three year plan of building that vision out," Wasson told us, during an interview at Citrix's Santa Clara headquarters. "I think what you saw in XenSource is the final piece. If you didn't quite see what we are building over here in the corner, then this acquisition really hit the floodlights on it."
The new kid in town
Citrix claims a number of unique angles in the virtualization game that could give it an edge over the competition.
For one, it has a long history doing virtualization-type things by pushing shared software out from the server room onto users' desktops and making that a tolerable experience. More recently, Citrix rolled out a full-on Windows desktop virtualization product that lets it grab entire desktops and application bundles. Earlier this month, Dell also picked up the technology Citrix acquired from Ardence to let customers manage up to 100 full PC desktops on a server and send out those operating systems and applications via the network.
So, we find Citrix working its virtualization play, primarily with Windows, from the desktop out angle, while the big names in virtualization VMware, Microsoft and XenSource have done more of a server-centered thing so far.
Secondly, Citrix thinks it can engineer some interesting tactics on the pricing front that the server guys might not try.
Wasson declined to offer any specifics on how Citrix would shake up virtualization pricing but did say that the per processor model used by VMware and XenSource historically might not be the company's favored approach. Citrix is intent on "providing customers with things that can be consumed in easier and far more economical ways," according to Wasson. We tend to think that means sending virtualized software out on a per user cost basis rather than metering by the socket. Or perhaps you receive a discount for doing both desktop and server virtualization.
Buying fame: A pricey adventure
While Citrix may be a grizzled "virtual" player courtesy of its streamed application expertise, there's no question that VMware is the dominant virtualization player right now. VMware appears to have no intention of resting on its server-side laurels and has already shipped a number of desktop virtualization products. In addition, you'll find start-ups such as Pano Logic - run by a former XenSource CEO - teaming with VMware on desktop streaming.
Citrix paid $500m for the chance to go after VMware on all fronts, and that price looked - and still looks - high to us. At the same time, VMware's market cap has irrationally surged to $39bn, so, if Citrix can tap into just a fraction of the insanity, it should look like a real winner.
"In three or four years, they will say the price was a bargain," Wasson said. "The technology of virtualization is so empowering that history will vindicate us on that front."
Yeah that's what we need, run a $hit OS on top of a $hit OS. I can't see why anyone would want to run VMs on top of Windoze. Think patching, and instability. If you work in a datacenter where they force you to use Windoze on the servers then you know how many times processes hang on a Windoze box. I have no problem with running it on top of Linux or another 'nix platform because that would actually make sense. Patch one VM while running another instance of it and no down time but IMHO it is suicide to run VMs on Windoze no matter what the host virtualization software is.
Do some research first
Another poor article on the virtualization space from The Register. I wonder if any research went into this article at all, considering some of the glaring inaccuracies like the following:
"Microsoft will fail to make such claims next year when it ships a revamped virtualization platform that lacks key tools such as the ability to move virtual machines around physical servers."
This is just plain incorrect: Virtual Machine Manager can do this today (http://www.microsoft.com/systemcenter/scvmm/default.mspx). If you're talking about high availability, then has been available for a while using Virtual Server and Microsoft Clustering Services (see http://www.microsoft.com/downloads/details.aspx?FamilyID=09cc042b-154f-4eba-a548-89282d6eb1b3&displaylang=en).
As for: "In reality though, it just may be the case that Microsoft never gets this virtualization thing quite right." I'm not quite sure what you're getting at: Virtual Server is here today, and it works. A windows server virtualization CTP was released alongside Windows Server 2008 RC0 just recently (http://www.microsoft.com/windowsserver2008/virtualization/install.mspx), and it works. Microsoft offers virtualization management in the form of SCVMM (see above), which actually outshines VMWare's equivalent Virtual Center in some areas.
I know that MS is everyone's favourite punching bag, but how blatant does it have to be? Sheesh.
"[citrix] has a long history doing virtualization-type things by pushing shared software out from the server room onto users' desktops and making that a tolerable experience."
lies lies and more lies. I've been on the receiving end of several Citrix remote application installations in various jobs over the last 7 or 8 years. Perhaps the problem lies with insufficient bandwidth or other resource constraints, but in each installation I've encountered it has inevitably become referred to as "Shitrix". 'nuff said.